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San Francisco

Wells Fargo to sell one SF office tower, renew lease on another

Banking giant makes moves as hybrid model on return-to-work kicks in

From left: 550 California Street, Wells Fargo CEO Charles Scharf and 333 Market St., San Francisco (Minesweeper, CC BY-SA 3.0 via Wikimedia Commons, Getty, Google Maps)
From left: 550 California Street, Wells Fargo CEO Charles Scharf and 333 Market St., San Francisco (Minesweeper, CC BY-SA 3.0 via Wikimedia Commons, Getty, Google Maps)

The Wells Fargo wagon will soon roll into a smaller barn in San Francisco.

Faced with a hybrid work model that requires fewer corporate employees to report to offices, the banking giant is preparing to list a 13-story office building it owns and occupies at 550 California St., the San Francisco Business Times reported, citing unidentified sources. A deal is expected to take place within two months.

At the same time, the San Francisco-based bank will renew its lease at 333 Market St. for undisclosed terms, sources say. It leased the 622,300-square-foot building in April 2018 from Columbia Property Trust.

A Wells Fargo spokesperson declined to confirm or deny the moves, according to the newspaper.

“As part of our multiyear effort to build a stronger, more efficient Wells Fargo, we continually assess our real estate portfolio to ensure we are best meeting the needs of employees and customers, responding to consumer and economic trends, and managing our costs responsibly,” the spokesperson said.

It’s unclear how much Wells Fargo will ask for the 332,670-square-foot tower at 550 California. The bank acquired the building in 2005 for $107.9 million, or $324 per square foot.

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The corporate headquarters for Wells Fargo is at 420 Montgomery St., around the corner from 550 California, in the Financial District, and six blocks from 333 Market.

The bank set a national return-to-work date of March 14, and its employees now spend at least three days a week in the office in a hybrid work model.

In a recent earnings call, Wells Fargo Chief Financial Officer Mike Santomassimo touted cost-cutting efforts by the bank, including reducing its real estate portfolio by about 7 percent., the newspaper reported.

“Headcount across the company declined approximately 6 percent from a year ago, excluding divested businesses,” Santomassimo said in January. “In addition to reducing the number of branches, we also reduced our office real estate portfolio by approximately 7 percent and occupancy expense was down 9 percent compared with a year ago.”

[San Francisco Business Times] – Dana Bartholomew

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Bay AreaCommercial Real EstateOfficeOffice MarketSan Francisco